RPVCCA_SA_SR_2012_12_04_C_RDA_Dissolution_And_StatusCITY OF
MEMORANDUM
RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
HONORABLE CHAIR AND MEMBERS OF THE BOARD OF
DIRECTORS OF THE SUCCESSOR AGENCY TO THE RANCHO
PALOS VERDES REDEVELOPMENT AG~
DENNIS McLEAN,FINANCE OFFICER ~
DECEMBER 4,2012
REDEVELOPMENT DISSOLUTION STATUS_~D UPDATE
CAROLYN LEHR,EXECUTIVE DIRECTOR ~
Staff Coordinator:Kathryn Downs,Deputy Director of Finance &Information
Technology
RECOMMENDATION
Receive and file this report.
BACKGROUND AND DISCUSSION
1{J)
On January 31,2012,the Rancho Palos Verdes Redevelopment Agency (RDA)was
dissolved and the Successor Agency to the RDA was formed pursuant to state law signed
by the Governor on June 29,2011.The state Dissolution Law required the designation of
a successor agency for each redevelopment agency,and in almost all caseS,the city that
formed the redevelopment agency has elected to serve as the successbragency.The
state Dissolution Law also required the creation of a separate oversight board to monitor
the actions of the successor agency.The Dissolution Law mandated the composition of
the oversight boards and the entities that are responsible for appointments to oversight
boards.
Other than the City Council's election to retain the housing assets and function of the
former RDA,which resulted in a transfer of $5.5 million of assets to the City,all actions of
the Successor Agency and its Oversight Board have been required by state law.Penalties
for non-compliance include state retention of the City's property tax revenue.In addition,
compliance with the law should lead to repayment of at least a portion of the City's $19
million Consolidated Loan to the former RDA.
The Successor Agency continues to wind up the affairs of the former RDA in accordance
with state law and pursuant to oversight,regulation and the filing of reports with the
SA C-1
REDEVELOPMENT DISSOLUTION STATUS AND UPDATE
December 4,2012
Page 2 of 4
California Department of Finance,the Los Angeles County Auditor-Controller and the 7-
member Oversight Board for the Successor Agency.Five members of the Oversight Board
were appointed by other governmental agencies and two members (Former Mayor Dyda
and City Employee Kit Fox)were appointed by the Mayor on behalf of the City.The
Oversight Board has conducted 8 publicly noticed meetings since its inception.Former
Mayors Clark and Wolowicz were appointed by the County and serve as Chair and Vice-
Chair,respectively.Kathryn Downs,Deputy Director of Finance and Information
Technology,serves as the staff liaison to the Board as well as co-Finance Officer of the
Successor Agency along with the Finance &Information Technology Director.Richards,
Watson &Gershon serves as legal counsel to the City and the Successor Agency
regarding its affairs.
Overview.of Revenue,Expenditures and Balance Sheet of the RDA upon Dissolution and
Activities of the Successor Agency
Pr.ior to Dissolution,the FY11-12 RDA budgetfor annual revenue and expenditures was as
follows:
Property Tax Increment
Interest Earnings
Advance from
1,172,500
1,470
Admin &Professional Exp
Pass-Thru to County Fire (17%)
County Debt Payments
Accrued interest on City Advance
PVDS Landslide Stabilization
Parcel Assessments
52,900
199,300
684,450
649,500
119,981
1
On January 31,2012,upon Dissolution,the RDA's balance sheet was as follows:
546,494
5,290,754
126,320
225,785
291
225,785
291
442,994103,500
5,290,754
126,320
Cash
AMCAL Receivable (net of City portion)
Mantilla Receivable
PBCHOA Receivable
Dr"r,ort\l Tax Increment Imn","'MOM
Debt to County
Consolidated Debt to
5,499,904
1 3
5,499,904
1 3
These assets and liabilities,as well as the land owned by the former RDA,were transferred
to the Successor Agency on February 1,2012,pursuant to state law.Since that time,the
Successor Agency has:
SA C-2
REDEVELOPMENT DISSOLUTION STATUS AND UPDATE
December 4,2012
Page 3 of 4
1)Remitted $51,232 to the County for excess FY11-12 tax increment per AB1484;
2)Remitted $103,500 of Low &Mod Income Housing Fund cash to the County;and
3)Transferred $5.5 million of housing assets (two notes receivable plus accrued interest)
to the City pursuant to the City's election to retain the housing assets and function of
the former RDA.
Transfer of the housing assets (the notes receivable)will provide a future funding source
for the City to meet its affordable housing requirements.
On June 1,2012 the Successor Agency received $118,818 of Redevelopment Property
Tax Trust Fund revenue (RPTTF formerly known as property tax increment)to cover
administrative costs for the period of July 2012 through December 2012.Staff expects that
the Successor Agency's costs during this period will not exceed the allowance.
The expected accounting for the January 2 nd installment of RPTTF for the period of
January 2013 through June 2013 follows:
RPTTF (Property Tax)
Auditor-Controller Fees
Fire District Pass-Thru (17%)
1997 Bond Payment to County
Deferred Interest Debt Payment to County
Distributed to RPV for Admin
548,625
(19,381)
(93,266)
(123,625)
(223,286)
The Successor Agency has complied with the RDA Dissolution law,and has submitted all
required reporting and payments on time.The Oversight Board has held 8 meetings since
May,and has completed its actions on time.As reported in Weekly Administrative Reports
and Staff Reports,Staff estimates that it has incurred approximately 456 hours supporting
the dissolution of the RDA to date and expects to incur about 800-1000 add1ttG>nal hours
through completion of the dissolution.Actions taken by the Oversight Board have included:
~Approval of the administrative cost budgets;
~Approval of the Recognized Obligation Payment Schedules;
~Designating a City Official to answer California Department of Finance questions;
~Directing the Successor Agency to transfer housing assets to the City;and
~Approval of the Low &Moderate Income Housing Fund Due-Diligence Review.
The next series of Oversight Board meetings in December and January will focus on the
Due-Diligence Review for all other funds of the former RDA.Completion of this final Due-
Diligence Review is expected to result in another disbursement of cash to the County
Auditor-Controller for distribution to the taxing entities.The City receives an approximate
6%share of these distributions.
Staff expects continued compliance with reporting and payments without any issue,as well
as issuance of a Finding of Completion from the California Department of Finance mid-
SA C-3
REDEVELOPMENT DISSOLUTION STATUS AND UPDATE
December 4,2012
Page 4 of 4
2013.It is expected that the Finding of Completion will enable the City's Consolidated
Loan to be recognized as an enforceable obligation,with potential future repayment from
RPTTF once the debt to the County is repaid.
Staff expects that the Successor Agency will develop a plan for disposition of the land
owned by the former RDA during 2013 (Abalone Cove Shoreline Park,adjacent open
space and vacant lots on Cherry Hill).As described previously,this plan may include a
recommendation to transfer the land to the City.Transfer of the vacant lots on Cherry Hill
will prOVide the City with additional right of way access into the landslide area.Considering
that the land is within an active landslide and is currently being used for a governmental
purpose,it seems unlikely that the land will be of much value to the other taxing entities.
SA C-4